Do you feel that? No treacherous ice under your feet as you walk, and the sound of singing birds fill your ears at every corner. Yes, spring is in the air – the best season to rent your property has finally arrived.
The holidays are long past while the worst of the weather is behind you. Now, prospective tenants are out in droves and the market is yours.
Renting your property can be a rewarding experience. A steady monthly income will diversify your revenue stream, improve your cash flow position, and offset the cost of ownership. At the same time, like any enterprise, the rental business must be managed judiciously to avoid any undue stress.
Here are six things to consider before renting out your property:
#1 The Tenant Can Be an X-Factor
Matching with the right tenant can be a challenge, and many property owners have alarming anecdotes to share. Fortunately, a solution exists. Check out rhenti.com for more information on their platform, which thoroughly vets both rental listings and renters before matching them together. .
Once you find a good renter it’s advisable to maintain a good relationship. Though keep in mind that even the best one may run into an unforeseen financial speedbump. Have enough in the bank in the unlikely event your tenant asks for an extension or there is extended downtime between tenant turnover in a cooling market.
#2 Your Insurance Policy May Need to Be Amended
Don’t assume that your existing homeowner’s policy will cover any damage caused by the tenant or protect you in case someone is injured on your rental property. Pick up the phone and give your advisor a call. You may need additional coverage.
#3 Fixed Costs Should Be Accounted For
Depending on the situation, you could be responsible for seasonal upkeep such as lawn maintenance, snow removal, or sewer cleaning. Factor these costs in early and have a working relationship with reliable handymen such as electricians or plumbers so that you aren’t caught unawares when the time comes. Remember, ignoring these responsibilities can result in fines.
#4 Variable Costs Can Sneak up on You
It’s only a matter of time before an appliance or a piece of the property, such as a window or a door, needs to be repaired or replaced. Certain variable costs can be exceptionally high, especially in treacherous weather. It’s best to maintain reserves to comfortably deal with any eventuality.
#5 Provincial Rules Are a Crucial Component of the Rental Business
Every locality has different rules for renting out properties. Not only can this vary from country to country but province to province. For instance, you could be responsible for something as simple as fire safety. Familiarizing yourself with the local regulations can mean the difference between a seamless experience and a bumpy ride.
#6 Your Taxes Could Change
Once your income grows from your rental business, you could owe a larger cut to the tax man. On the flip side, you could also qualify for tax benefits. Consult with your accountant so you’re prepared when tax season rolls around.
It’s easy to feel overwhelmed by the rental game but remember, with some preparedness you’ll be able to profit and prosper.